Dáil Éireann debate -
Thursday, 27 Jan 2000

Vol. 513 No. 2

Written Answers. - Inflation Rates.

Bernard J. Durkan

Question:

129 Mr. Durkan asked the Minister for Social, Community and Family Affairs the consideration, if any, he has given to higher inflation rates arising from the budget; the measures, if any, he has taken to address this issue; and if he will make a statement on the matter. [2154/00]

Bernard J. Durkan

Question:

130 Mr. Durkan asked the Minister for Social, Community and Family Affairs the supplementary budgetary measures, if any, he has to compensate social welfare recipients arising from higher inflation rates; and if he will make a statement on the matter. [2155/00]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

It is proposed to take Questions Nos. 129 and 130 together.

The monthly CSO report on the Consumer Price Index which was published last week highlights that over the whole of 1999 prices increased on average by 1.6%. As social welfare rates were increased by between 4% and 8.3% from the beginning of June, 1999, this means that these increases were well ahead of average annual inflation for the year and represented real increases of between 2.4% and 6.6%.

The recent social welfare budget package, which is the biggest ever social welfare budget allocation amounting to over £423 million on a full year basis, provides,inter alia, for a £7 a week increase for pensioners and a £4 a week increase for all other social welfare recipients. As part of the process of aligning tax and social welfare changes by 2001, these increases are being paid 4 weeks earlier this year, from the beginning of May.

The £7 increase for pensioners represents an increase ranging between 7.9% and 8.9%, while the £4 increase represents an increase ranging between 5.2% and 5.6%. In his budget speech, the Minister for Finance indicated that taking account of the various measures which he was introducing in the Budget, annual average inflation for 2000 is expected to be 3%. Therefore, these increases are again well ahead of expected inflation, representing real increases ranging between 2.1% and 5.7%.